Oil prices floated higher as the week drew to a close, heading back up from a 20% fall since the terrorist attacks on the US.

Opec has been warned against cutting output

Prices were lifted from Wednesday's lows by speculation that the Opec cartel of oil producers will cut output, and by the threat of military action against Afghanistan.

"After attention to the dire economic projections, the focus seems to be shifting back to the prospect of supply disruption as a result of the impending conflict," a report by NM Rothschild said.

An additional squeeze on supply would arise if the Opec oil producers were to decide to cut output in accordance with their own price manipulation mechanism.

Outside the range

The Organisation for Petroleum Exporting Countries' own rules allow for a cut of 500,000 barrels a day if the average price of a basket of seven crude oils fall below or rise above a range of $22-28 per barrel.

I think that the Opec members should be cautious about changing production decisions

Spencer AbrahamUS Energy Secretary

This was expected to have happened on Friday, though it will not be known for certain until Monday when Opec releases the average price.

On Sunday, oil ministers from Saudi Arabia, Iran, Algeria and Venezuela, together with non-Opec member Mexico are reported to be meeting to discuss production levels.

Speculation among traders that Opec would announce a cutback early next week helped fuel oil prices on Friday

The benchmark Brent North Sea crude oil for November delivery rose to $22.63 per barrel on Friday afternoon.

That was still below last week's $23 per barrel, though an improvement from a couple of days earlier when the price fell below $22 per barrel due to concern about faltering global demand.

Cut unlikely

Experts warned against taking a cut in output for granted.

Nothing has been ruled out

Ali RodriguezOpec

"I don't think Opec will react so quickly, neither this week nor the next," said an insider who wanted to remain anonymous.

On Thursday, Opec president Chakib Khelil said a cut in output ahead of US military action against Afghanistan was unlikely.

"We don't want to make a decision just before that happens," he said.

"Our objective is to make sure that we don't enhance any price increase that could result from the attack, if there will be one."

Warning

On Friday, the US energy secretary Spencer Abraham issued a thinly-veiled warning to Opec not to stray from that chosen path.

We are confident that Opec will be prepared to take further action to support the oil price in the coming months

Morgan Stanley

"I think that the Opec members should be cautious about changing production decisions," he said.